There is a recognized need in the financial services industry to attract and retain loyal customers. A loyal customer is one who establishes all or a significant number of his Relationships with a single Bank and does so over an extended period of time. This need is particularly important to Banks in small and medium sized communities where regionally and nationally marketed financial services have attracted customers away from the local institutions. This need is also important to Banks in highly competitive markets where customers are offered a wide variety of investment and Relationship options, some of which may individually be very enticing to existing customers of other Banks.
Incentive programs for rewarding repeat or ongoing customers have become increasingly common in a variety of industries. Well known examples of the use of incentives to attract and reward repeated customer patronage are airline frequent flyer programs. In airline frequent flyer programs the customer is awarded points, often expressed in terms of "miles traveled" for each use of a particular airline or its affiliates. Additional points or "miles" are awarded for use of ancillary services such car and hotel room rentals. Other examples of customer incentive programs include the trading stamp programs once popular in the grocery retail trade.
The assignee of the present invention has developed a Bank customer incentive program called the "Loyalty Banking.RTM. Program." Under the Loyalty Banking Program a Bank rewards customers who have Relationships with the Bank and who maintain those Relationships for extended periods of time. A portion or all of the Bank's customers may be enrolled or participating in the program. Other customers may not be enrolled in the program. A score card is manually maintained for each customer enrolled in the Loyalty Banking Program. Points are manually calculated based on the information manually entered on the score card, and Incentive Rewards are manually awarded on a periodic basis for the number of Relationships maintained by the customer at the Bank. The point awards may be increased in relation to the length of time the customer maintains the Relationships at the Bank. Based on the points accumulated by the customer as represented by the score on the score card, the customer periodically receives Incentive Rewards.
The implementation of a customer incentive program for Bank customers has complexities not found in customer incentive plans in other industries. The Relationships between the Bank and any customer may be quite numerous and complex, involving a number of different kinds of accounts and interactions. Most other incentive programs require tracking of only one customer factor such as miles travelled in a frequent flyer program or the total dollar volume of purchases in a grocery store trading stamp program.
Implementation of the assignee's manual Loyalty Banking Program is difficult, time consuming and labor intensive. There is always the increased risk of incorrect calculations resulting from human computations. Maintaining a manual Relationship score card on each Bank customer duplicates much of the data available in the computer data bases maintained by most modern Banks.
There can exist a great deal of variation among Banks in the types of financial services offered and emphasized. In particular, different Banks may wish to establish different scoring systems for the various types of Relationships, depending on which Relationships they find to be most profitable. Further, each Bank may wish to establish a different award structure of incentives, depending upon that Bank's perception of the benefits of the program in relation to the costs of the incentives and to the needs of its particular community.
Furthermore, for an incentive program to be fully effective as a tool for attracting and retaining long-term customers, it is desirable for the Bank's management to be able to monitor the Relationships between the Bank and the customers as individuals and in groups. The Bank may thus be able to identify significant opportunities for marketing its financial services by evaluating the Relationships and their appeal to customers.
It is against this background that the present invention has evolved.